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From 100% to 1.6%, the share of state-owned assets in the entire bicycle industry in Tianjin, is a standard "national retreat into the people" process. "Flying Pigeon" expansion, decline until today's newborn, finally step by step back to normal. However, it is an unattainable dream for Flying Pigeon to restore its former glory. China Weekly's Feng Xiang reports from Tianjin
Tianjin, Dongli District, Chenglin Industrial Park, the avenue is dusty, and trucks carrying goods are coming and going.
"Are you looking for China Flying Pigeon?" Watermelon vendors and bicycle repair workers can point in the right direction, even if it's a kilometer or two away. "Flying Pigeon, now known as Tianjin Flying Pigeon Vehicle Manufacturing Co, moved here just over three months ago.
This is the most recent state of Flying Pigeon's existence. The two factories of "Flying Pigeon" in Xiqing and Beichen districts have become a thing of the past, not to mention the old factory on Sixth Road in downtown Tianjin, which used to transport bicycles from one place to another. The name of the place where bicycles were once transported to more than 50 countries and regions around the world, now stands a wide residential neighborhood. The factory has long been sold off to cover its debts.
Gao Yuliang, deputy general manager of Flying Pigeon, told China Weekly that Flying Pigeon now has an annual production capacity of 1.2 million bicycles. Some of them are labeled as OEM.
This figure is not impressive in the context of Tianjin's annual output of 47 million bicycles. Compared with its own past, it can only be described as "weak". Once upon a time, "Flying Pigeon", a familiar name in China, is synonymous with the bicycle industry in Tianjin. As the birthplace of Chinese bicycles, Tianjin's name has always been associated with "Flying Pigeon". 1950, the first bicycle designed and manufactured by New China was born in Tianjin Bicycle Factory No. 1, named "Flying Pigeon". In the process of bicycles becoming a common means of transportation for Chinese people, "Flying Pigeon" and Shanghai's "Permanent" and "Phoenix" were known as the three major brands of bicycles in China.
During the period of "Sixth Five-Year Plan" and "Seventh Five-Year Plan", Tianjin Municipal Government invested 240 million yuan to carry out large-scale technical transformation of "Flying Pigeon". Since the liberation to the end of the 1980s, the bicycle industry in Tianjin, with "Flying Pigeon" as the leader, paid more than 6 billion yuan of profits and taxes to the state, and it was one of the pillar industries in Tianjin.
Zhao Zhiguo, a technical worker then and now the minister of technical inspection, recalled that as workers of "Flying Pigeon", they enjoyed a benefit that won the envy of the society at large: in the era when materials were supplied by ticket, each of them was given a ticket to buy "Flying Pigeon" every year. Flying Pigeon". At a time when bicycles, watches and sewing machines were known as the "three big things" in Chinese households, this ticket was so valuable that it was often reserved early by friends and relatives: "I'm getting married next year, so keep that ticket for me!"
At the time of the wedding, a brand-new "Flying Pigeon" was often the woman's entire dowry, winning a burst of envy. Many people could not get a ticket to buy a bicycle, so they had to collect bicycle parts and put one together themselves.
In 1988, the entire bicycle industry in Tianjin, including another famous bicycle brand "Red Flag", was concentrated under the name of "Flying Pigeon", which became the "Flying Pigeon Group" of more than 30,000 people. Flying Pigeon Group". This was the top of "Flying Pigeon's" glory in the planned economy era: state-owned assets accounted for 100% of the city's share of the bicycle industry, with an annual output of 6.61 million units.On Feb. 25, 1989, U.S. President George W. Bush paid a visit to China. The then Premier Li Peng met him in Diaoyutai State Guesthouse in Beijing, and presented the couple with two Flying Pigeon bicycles as a "national gift". From then on, "Flying Pigeon" entered the U.S. market smoothly, and it also became one of the materials for China's foreign aid to third world countries.
Behind the apex lies a huge crisis. "As a large state-owned enterprise, Flying Pigeon relied on two major assets: bank loans under government directives, and underwriting of all products. For decades, Flying Pigeon has had only two colors: black and green.
A paper led by He Jinsheng, a professor at Tianjin University's Institute of Corporate Strategy and Culture, described Flying Pigeon at the time as "conservative, narrow-minded, arrogant and egotistical," with "distinctive characteristics of a state-owned enterprise. The reason for this was that "the enterprise did not have direct access to the market. The reason was that "the enterprise did not face the market and customers directly, and all it had to do was to follow the administrative order to produce". The negative impact of administrative orders on "Flying Pigeon" began to emerge from the mid-1980s. Would it be OK to take the Geely logo off and replace it with a BMW logo in an attempt to make a car sell for more?
Of course not. However, this similar behavior is not a hypothetical, but a reality. "Flying Pigeon and Red Flag have done this before, at the behest of the government. The only reason was that a Flying Pigeon cost twenty dollars more than a Red Flag.
Imagine the awkwardness of the scene: obedience to the leadership, the transfer of technical information, design drawings, "Flying Pigeon" people are dissatisfied, that robbed their own market; "Red Flag" people are reluctant, cheap and durable is the 26th type at that time! "Red Flag" is a major selling point, the car has a gag "do not eat grass small donkey", popular in the rural market. Who would be happy for their brand to be canceled?
The two factories face the same task: the factory director to the deputy factory director to do the ideological work, the deputy factory director to do the ideological work of the workshop director, the workshop director to do the ideological work of the deputy director of the workshop ......
The unification of the two industrial brands, how easy it is. Need to change the drawings, change the mold, change the lathe, not to mention the two positioning, the market are not the same brand. By the "red flag" into the "Flying Pigeon" was soon known as "fake Flying Pigeon", and then dragged down the entire "Flying Pigeon "Flying Pigeon "Permanent" "Phoenix" took the opportunity to seize market share ......
The time was around 1986. The reform was carried out for more than a year and was forced to be suspended. "The reform was a failure, but there were benefits at the time. Who got the benefit? The government." Xiao Qingyuan, the group's general manager at the time, told China Weekly. He tried to talk about the significance of the reform from a positive perspective: Tianjin was in a period of intensified municipal infrastructure construction, and there was an extreme shortage of funds. The change from "Red Flag" to "Flying Pigeon" did increase sales revenue. This extra money was naturally turned over as profit and used to build several important highways in Tianjin, including the Central Ring Road.
After a decade, Flying Pigeon people were owed pensions and medical bills due to the decline of the factory. No one could have predicted the consequences.
Beginning in the 1990s, the institutional reforms that swept across China were extended to the bicycle industry. The government realized that it could no longer support the huge, low value-added industry. Starting in 1990, the Tianjin Light Industry Bureau issued a large number of temporary production licenses for bicycles to private companies, while on the other hand reducing or even stopping investment in the bicycle industry and identifying it as "an industry where state-owned assets have been withdrawn".
In this situation, many private enterprises, township enterprises quickly joined the bicycle industry. At that time, Flying Pigeon basically only made two models, the 26 and 28, and even the 24 model, which was the most popular choice for Chinese women, was rare. It took at least two years to change a model. "There's an analogy: the river is frozen. We go back to a mobilization meeting and start designing ice bikes. People's private enterprises directly take an ice crawler to put up: 50 cents a person; the results of the hair. When we bring the ice truck next year, the river has melted." A then "flying pigeon" executives said.
By 1998, the Flying Pigeon Group was in a state of collapse, with five consecutive years of losses, amounting to more than 300 million yuan, and a large number of personnel loss. At the same time, the private sector to take advantage of the "Flying Pigeon" out of technology, management personnel, step by step to grow. A district mayor of Tianjin said: "If a pigeon falls, ten million sparrows fly up." In 1998, hundreds of "Flying Pigeon" old employees went up to Tianjin's Central and Outer Ring Roads to express their demands by blocking the roads. Because "Flying Pigeon" was too famous and influential, the then factory manager and secretary were both dismissed. This incident marked the complete decline of "Flying Pigeon".
After that, no one was willing to take over this mess, and even the group's deputy general manager was refused to take over as factory manager. In the end, it was the administrative instruction that came into play: if you don't go, you'll be dismissed immediately! "Flying Pigeon" only has a factory manager.
Gong Xiaoyan, 64, was deputy general manager of Flying Pigeon Group, in charge of "relief work". For those days, she did not want to use the word "unbearable". Running to the municipal government, district government, labor bureau, economic commission, trade unions, industry and commerce bureau, one by one, the government offices begged and begged to find a policy for the workers, to find treatment, to find a way out. Even if the plant is rented separately whether it is in line with the regulations, she had to go to the relevant government officials, hard to drag people to the site office - workers have to find another way out, or dependent on the group under the single, Flying Pigeon Group's subordinate enterprises in three years, an increase of one hundred. Late at night on a snowy day, she negotiated alone with hundreds of laid-off workers, bitterly almost begging them not to take drastic action ...... That period of time left her with diabetes, high blood pressure and a full range of diseases. One led to a near hemiplegia and she had to retire early.
"She (Gong Xiaoyan) had to come up with at least six or seven million dollars for the workers during that time." An old Flying Pigeon man said. For individuals, this number is huge enough and something to be proud of. But to save Flying Pigeon Group, can only be a drop in the bucket. According to Gao Yuliang, who was the deputy director of the Financial and Audit Office, recalled that at that time, a subordinate factory of the Flying Pigeon Group spent millions of dollars per month on medical treatment for retired workers, and the whole group needed between 150 million and 200 million yuan per month in order to turn around. Every moment is growing bank loans and interest on corporate debts, for the "Flying Pigeon" at the time, are astronomical.
According to the data provided by Flying Pigeon Group, the price of a bicycle on the market at that time was about 200 yuan, while the cost of a "Flying Pigeon" was 600 yuan. Those conscientious lifelong old workers to study the cost savings, a seventy processes of the bell only earn a few cents; can not help "Flying Pigeon" huge non-production department of people eat horse feed: enterprise management office, quality control office, housing management section, administrative section, catering section, kindergartens, hospitals, technical schools, staff college ... ...In the era of planned economy, such a redundant structure is the ultimate development direction of all enterprises.
In 1999, the central government issued the Decision on Several Major Issues Concerning the Reform and Development of State-Owned Enterprises, which called for the separation of the functions of enterprises to run the society, and the gradual transfer of schools, hospitals, and other social service organizations to the local government for integrated management. It's already too late for "Flying Pigeon".
The more it produces, the more it loses money, which is a big reason why the government is determined to get out of the business. Now Flying Pigeon has abolished all of the above departments. The only remaining departments have become part-time production staff. The biggest advantage of Flying Pigeon Group is the name "Flying Pigeon". Further delay is not an option. Flying Pigeon Group came up with a solution: "Cut down the tree and leave the root to protect the brand." That is: to divest part of the production capacity, the deployment of competent personnel, technology and equipment, and the formation of a separate business entity, Flying Pigeon Group in the form of paid "Flying Pigeon" brand transfer to its use. In this way, the original debt will be carried by the group, and the new enterprise entity can be lightly loaded.
In 1998, Flying Pigeon took out a loan of 15 million yuan to set up a wholly-owned company called Flying Pigeon Bicycle Company, in which Zhao Zhiguo and Gao Yuliang were both members. In one year, the company made a profit of 10 million yuan. However, it can watch the old group with tens of thousands of workers in debt, indifferent to it? 10 million profit all by the group to draw back to save the emergency, the company can not be run.
"There was an analogy: we are a small submarine, the group is an aircraft carrier. We're a submarine that can tow an aircraft carrier?" he said. Gao Yuliang said.
People with a clear understanding of the law can easily see that "cutting down trees and leaving roots" does not allow "Flying Pigeon" to throw off the burden. 1999, Shanghai Baosteel Group "Flying Pigeon" owed 1400 yuan of steel payments for many years. It owed 14 million yuan of steel payments for many years, filed a lawsuit and demanded the seizure of "Flying Pigeon" brand, ready to force it to auction. At this time, the government finally rewarded "Flying Pigeon" for its contribution over the years. The Tianjin municipal government intervened, negotiated and communicated with the Shanghai side repeatedly, and finally reached a repayment agreement in 2002, which saved Flying Pigeon from the crisis. There were several other similar crises that were resolved by the government.
It's hard to say whether the lawsuit pushed Flying Pigeon to reform. That year, the second "chopping down of trees and leaving roots" laid the foundation for today's "Flying Pigeon" form of cooperation: joint stock management, public-private partnership. Tengda company, a township enterprise in Xiqing district of Tianjin city, contributed land and factory building, and Huazhe investment company under Tianjin Economic Commission put out 4 million RMB, and set up "Flying Pigeon Bicycle Co.
In 2004, Zhang Jian, the boss of private company Taimei, together with the management of "Flying Pigeon", injected 8.08 million yuan in their personal names, and the shares held by the three state-owned shareholders were reduced to 58%. 2007, the company's annual output had reached 1.3 million units.
However, under this form of operation, conflicts between shareholders emerged again. "The shareholding at that time was very confusing and unclear. For example, the equipment that we, the Flying Pigeon Group, used for our shareholding was all old equipment from many years ago, with no depreciation calculated; the total shareholding was 19.24 million yuan, and the plant alone was worth 6.7 million yuan." Gao said, the shareholders demanded "Flying Pigeon" to brand shares. In the state-owned shares do not dominate the situation, this is the same as to give "Flying Pigeon" brand. This prompted "Flying Pigeon" to carry out the third "cut down the tree and leave the roots".
March 2009, Tianjin Flying Pigeon Group funded the return of the shares of all parties, took the "managers shareholding" mode of operation. It contributed 5 million yuan, the former deputy general manager Zhang Jinying personal contribution of 3 million yuan, and served as general manager. In Dongli District, rented a piece of factory building, became the new nest of "Flying Pigeon": "Flying Pigeon Vehicle Manufacturing Co.
"Her (Zhang Jinying) 3 million yuan, should also be a few friends to put together." A "Flying Pigeon" employee said, citing an unconfirmed source.
8 million yuan, the entire capital of the new Flying Pigeon. This time, the property rights are completely clear, and all the production equipment has been replaced with new ones. "Flying Pigeon" finally became a thoroughly modern enterprise, to remove the burden of market competition. But this scale, in the bicycle industry in Tianjin city has not ranked.
The production of "Flying Pigeon" also includes two small enterprises under the Flying Pigeon Group: "Flying Pigeon Electric Vehicles Ltd." and "Flying Pigeon Electric Tricycle Co. Both are joint ventures between the state and private capital. Plus and "Flying Pigeon" the same decline of the "Red Flag", according to the Tianjin Bicycle Industry Association to the "China Weekly" data: the entire Flying Pigeon Group's assets, the bicycle industry in Tianjin City, accounting for only 1.6% of the share.